INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2008 Revision Notice Below]

Industrial production declined 0.2 percent in May after having fallen 0.7 percent in April. Manufacturing output was unchanged in May, the output of utilities shrank 1.8�percent, and the output at mines rose 0.1�percent. Factory output was boosted by a small pickup in the index for motor vehicles and parts. The end in late May of the strike at a parts producer had little effect on vehicle output for the month; the output of motor vehicles and parts remained about 10�percent below its February level. Excluding motor vehicles and parts, manufacturing production edged down 0.1 percent after having decreased 0.5�percent in April. At 110.9 percent of its 2002 average, overall industrial production was 0.1 percent below its year-earlier level. The rate of capacity utilization for total industry declined 0.2 percentage point, to 79.4 percent, a level 1.6�percentage points below its average for 1972-2007.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100						Percent change
	2007 Dec.[r]	2008					2007 Dec.[r]	2008					May '07 to May '08
		Jan.[r]	Feb.[r]	Mar.[r]	Apr.[r]	May[p]		Jan.[r]	Feb.[r]	Mar.[r]	Apr.[r]	May[p]
Total index	112.4	112.5	111.8	111.9	111.1	110.9	.1	.1	-.6	.1	-.7	-.2	-.1
Previous estimates	112.4	112.6	111.8	112.0	111.2		.1	.1	-.7	.2	-.7
Major market groups
Final Products	113.5	113.9	113.3	113.3	112.0	111.9	.2	.4	-.6	.0	-1.1	-.1	-.5
Consumer goods	107.4	108.0	107.2	107.0	105.8	105.6	.0	.5	-.7	-.2	-1.1	-.2	-1.6
Business equipment	131.2	131.5	131.3	132.2	130.0	130.0	.7	.3	-.2	.7	-1.7	.0	2.2
Nonindustrial supplies	107.6	107.7	106.3	106.8	106.0	105.8	-.3	.1	-1.2	.4	-.7	-.2	-1.9
Construction	104.2	103.7	102.4	102.1	100.7	100.5	-.3	-.5	-1.3	-.3	-1.4	-.1	-5.6
Materials	113.1	112.9	112.3	112.5	112.0	111.8	.1	-.2	-.5	.2	-.4	-.2	1.0
Major industry groups
Manufacturing (see note below)	113.8	113.8	113.0	113.3	112.3	112.3	.0	.0	-.7	.2	-.9	.0	-.3
Previous estimates	113.8	113.8	113.0	113.0	112.1		.1	.0	-.7	.0	-.8
Mining	103.9	103.3	103.6	103.2	102.7	102.8	1.0	-.6	.3	-.3	-.6	.1	2.2
Utilities	108.2	110.6	109.0	109.0	109.0	107.0	-.7	2.1	-1.4	.0	.0	-1.8	-.6

Market Groups

The production of consumer goods decreased 0.2 percent in May. The output of consumer durables rose 0.6 percent but was more than offset by a decline of 1.3 percent in consumer energy products; the production of consumer non-energy nondurables was unchanged. The increase for durable consumer goods reflected gains in both automotive products and home electronics. The indexes for appliances, furniture, and carpeting and for miscellaneous goods both fell. Among consumer non-energy nondurables, increased output of chemical products and miscellaneous nondurables offset declines elsewhere.

The output of business equipment was unchanged in May. The index for transit equipment decreased 0.4 percent. Higher production of autos and light trucks was outweighed by lower production of medium and heavy trucks and truck trailers. Although the index for information processing equipment moved up further in May, the increase for this category was the smallest since January 2007. The output of industrial and other equipment was unchanged; decreases among many of the components in this category were offset by production increases for farm and construction machinery, which moved up slightly after having dropped substantially in April.

The production of defense and space equipment fell 0.5�percent in May and has fallen more than 1 percent so far this year. Among nonindustrial supplies, the output of business supplies decreased 0.3 percent, and the output of construction supplies edged down 0.1�percent and has fallen for 10 consecutive months.

Materials output declined 0.2 percent; durable and energy materials both posted losses, while the index for nondurable materials registered a modest gain. Within durables, the output of consumer parts fell 0.8 percent after having fallen about 2 percent in each of the previous two months; reductions in the output of motor vehicle parts have contributed in large measure to the weakness in this index in recent months. The production of equipment parts edged up, and the production of other durable materials moved down. Among nondurable materials, the indexes for both chemical and textile materials rose, while the index for paper materials decreased. The production of energy materials declined 0.7 percent.

Industry Groups

Manufacturing output was unchanged in May, and the factory operating rate moved down 0.2�percentage point, to 77.5 percent, a level 2.2 percentage points below its 1972-2007 average. The production indexes for both durable and nondurable manufacturing industries were also unchanged. In addition to the motor vehicles and parts industry, other durable manufacturing industries that registered increases included fabricated metal products; computer and electronic products; electrical equipment, appliances, and components; and miscellaneous manufacturing. Decreases were recorded in the indexes for wood products, nonmetallic mineral products, machinery, aerospace and miscellaneous transportation equipment, and furniture; for furniture, it was the ninth consecutive monthly decrease. Among nondurable manufacturing industries, reductions occurred in the indexes for food, apparel and leather, paper, and petroleum and coal products. The production declines in these industries were offset by higher output for textile and product mills, chemicals, and plastics and rubber products. The production of non-NAICS manufacturing (logging and publishing) fell for a second consecutive month and has fallen 4.7 percent over the past 12 months.

The output of utilities decreased 1.8 percent, and the operating rate in this industry moved down to 83.7 percent, a level 3.1 percentage points below its 1972-2007 average. Mining production increased 0.1 percent; higher output of coal and increased drilling activity boosted this index. The capacity utilization rate for mining was unchanged at 89.6 percent, a rate 2.1 percentage points above its long-run average.

Capacity utilization at industries grouped by stage of process changed as follows: For the crude stage, utilization moved up 0.2 percentage point, to 89.0 percent, a rate 2.4�percentage points above its 1972-2007 average; for the primary and semifinished stages, utilization moved down 0.5 percentage point, to 79.3 percent, a rate 2.9�percentage points below its long-run average; and for the finished stage, utilization decreased 0.1�percentage point, to 75.9 percent, a rate 1.8 percentage points below its long-run average.

Notice

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board issued an annual revision to the indexes of industrial production (IP) and the related measures of capacity and capacity utilization on March 28, 2008. The revised IP indexes incorporated data from the 2006 Annual Survey of Manufactures and from selected editions of the 2006 Current Industrial Reports, all from the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2006 were also incorporated. The update included revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry as well as changes in the estimation methods for some series. Any changes to methods for estimating the output of an industry affected the indexes from 1972 to the present.

Monthly releases now include new or revised indexes for a six-month reporting window, which encompasses one month of new data and revisions to the previous five months of data. The new longer reporting window allows the incorporation of additional lagging data before an annual revision. Had a six-month window been used over the past year, an additional 3 percent to 4 percent of IP would have reflected source data. For a few indexes, the longer reporting window will cause the latest month of data shown to be as many as five months earlier than the latest value for aggregate IP; data for detailed production indexes are not shown in the supplement to the G.17 release until either the underlying data are available or the reporting window is closed.

Capacity and capacity utilization have been revised to reflect the revised production indexes and to incorporate data from the Census Bureau's 2006 Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.

The revision is now available on the Board's website (www.federalreserve.gov/releases/G17). The revised data are also available through the website of the Department of Commerce (www.stat-usa.gov). Further information on these revisions can be obtained from the Board's Industrial Output Section (telephone number 202-452-3197).

Note. The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS.

G.17 Release Tables:

Ascii	Screen reader	Summary: Industrial Production and Capacity Utilization
Chart		Chart 1: Industrial Production, Capacity, and Capacity Utilization
Chart		Chart 2: Industrial Production and Capacity Utilization
Chart		Chart 3: Industrial Production and Capacity Utilization, High Technology Industries
Ascii	Screen reader	Table 1: Industrial Production: Market and Industry Groups (percent change)
Ascii	Screen reader	Table 2: Industrial Production: Special Aggregates and Selected Detail (percent change)
Ascii	Screen reader	Table 3: Motor Vehicle Assemblies
Ascii	Screen reader	Table 4: Industrial Production Indexes: Market and Industry Group Summary
Ascii	Screen reader	Table 5: Industrial Production Indexes: Special Aggregates
Ascii	Screen reader	Table 6: Diffusion Indexes of Industrial Production
Ascii	Screen reader	Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities
Ascii	Screen reader	Table 8: Industrial Capacity: Manufacturing, Mining, and Utilities (percent change)
Ascii	Screen reader	Table 9: Industrial Production: Gross Value of Products and Nonindustrial Supplies
Ascii	Screen reader	Table 10: Gross-Value-Weighted Industrial Production: Stage-of-Process Groups
Ascii	Screen reader	Table 11: Historical Statistics for IP, Capacity, and Utilization: Total Industry
Ascii	Screen reader	Table 12: Historical Statistics for IP, Capacity, and Utilization: Manufacturing
Ascii	Screen reader	Table 13: Historical Statistics for IP, Capacity, and Utilization: Total Industry excluding Selected High-Technology Industries
Ascii	Screen reader	Table 14: Historical Statistics for IP, Capacity, and Utilization: Manufacturing excluding Selected High-Technology Industries